Energy bills are well below the peak of the 2022 crisis, but they have not gone back to where many people remember them. On 26 August 2026 Ofgem announced that the price cap will rise again from 1 October.
The Price Cap From 1 October 2026
For a typical household using electricity and gas and paying by Direct Debit, the price cap rises by 4% — £60 a year — from £1,663 to £1,723 a year. Average rates across England, Scotland and Wales are:
- Electricity: 26.32p per kWh, with a standing charge of 54.83p a day
- Gas: 7.97p per kWh, with a standing charge of 29.68p a day
From 1 October 2026 to 31 March 2027 there is no VAT on domestic electricity, which Ofgem says makes the typical figure around £45 lower than it would otherwise have been. Because of that change, Ofgem notes that electricity costs cannot be compared directly with earlier periods. Gas still includes VAT at 5%.
How the Price Cap Works
The price cap sets the maximum unit rates and standing charges suppliers can charge households on standard variable (default) tariffs. Ofgem reviews it every three months. It is not a cap on your bill: the typical figure is based on typical energy use, and if your home uses more, you pay more.
Why Prices Are Rising Again
Ofgem says the October 2026 increase reflects higher wholesale gas prices caused by the ongoing conflict in the Middle East. Gas matters even for electricity bills, because gas-fired power stations still often set the wholesale price of electricity when they are needed to meet demand.
Standing Charges
Standing charges are fixed daily amounts you pay just for being connected, however little energy you use. At the October 2026 cap they add up to around 84.5p a day for a home with both gas and electricity — roughly £308 a year before any energy is used.
What the Government Has Changed
The government’s Warm Homes Plan (March 2026) said an average of £150 of costs would come off household energy bills from April 2026, and VAT has been removed from domestic electricity from 1 October 2026. The Energy Company Obligation — run through energy suppliers, whose costs have historically been passed on through bills — ends on 31 December 2026.
What You Can Do
You cannot control wholesale prices, but you can reduce how much energy your home needs:
- Insulate: insulating an empty loft to 270mm saves around £140–£360 a year, according to the Energy Saving Trust. See our loft insulation guide.
- Check for help with costs: our grants guide covers the schemes still open, including the Warm Homes: Local Grant and the Boiler Upgrade Scheme.
- Consider solar panels: see our solar panels guide for typical costs and savings.
- Start with quick wins: simple changes like draught proofing and heating controls cost little.
- Compare tariffs: a fixed tariff, or a time-of-use tariff if you have a heat pump, battery or electric car, may cost less than the default tariff.
Sources: Ofgem, “Changes to energy price cap between 1 October and 31 December 2026” and press release of 26 August 2026; GOV.UK Warm Homes Plan (March 2026); Energy Saving Trust. Last reviewed September 2026.